okay little bit of give here. 1 be $1.4 trillion in new taxes. all i can tell you is it was very mistifying to be down there today. i like the cliffs and the floor of the new york stock exchange. there is always a bull market somewhere. i will see you tomorrow. >> good evening everyone. i'm larry kudlow. three major stories tonight and they all have financial and political fallout. starting in michigan where protesters stormed the state capitol to fight a right to work vote. >> on the way, and this issue boils down to fairness.

but there are different opinions and viewpoints. we have details straight ahead. >> larry, at the white house we have a flurry of activity on the fiscal cliff. exchange of offers and not sure how much real progress there is. but we'll have the details. >> and optimism. and the fed driving the market higher. first time since mid october. the kudlow report begins right now. >> all right but we begin with the breaking news coming out of michigan where republican governor snyder just signed into law a right to work bill.

lawmakers passed it today despite thousands of union workers who came to protest. we have the late ev. good evening ron. this one got pretty rowdy didn't it? >> it did indeed. but because there were two arrests as we are told. two people tried to storm into the governor's office building across the street. police were happy with how folks hafed themselves today. probably 10,000 probably a smaller group than we saw in wisconsin last year when that issue blew up in neighboring wisconsin. today i spoke to the governor who said this is not about the charges coming from the leadership. he said this is about fairness and giving workers the right to

choose whether they so choose or refrain from joining a june on. here is the governor talking about this issue. >> shouldn't the juunions be putting this out and should bt the workers make the decision? so that is why i view this as pro worker and not anti-union. they are upset about how this was pushed through. a lame duck section. democrats won ten extra seats and they felt that the culture in january would be different. they felt that they pushed this through because time was on

their side. larry. >> many thanks let's get to our special guest tonight. terry bowman president of union conservatives. welcome to the show. we were the guy who started this were you not? >> well, what i offered was the focal point for truth in this issue. after searching it hard, we came to the conclusion that it is very, very pro union worker legislation and that is what i have been doing, going around educatie ining union members an general public as well on what

the right to work means. they will be answering and accountable to their workers. >> terry, i know you were a member of the uaw. are you still a member? >> i worked yesterday. today i had to take a day off. still work the line for ford motor company. >> are they hassling you? what you have done is brave. you have given freedom of choice. they have more choice than they have before. how badly has the elders treated you right now? are they coming after you terry? >> good question, larry, i have been public for this in a couple of years. i do a lot of interviews. so, the uaw officials have chosen to leave me alone for

now. could that change? that is possible. and i'm well to get into that debate for my officials. for now, there hasn't been a lot of hassle. i have gotten threatening calls but they have left me alone. >> there is nothing against unionization in this bill. it gives people the right to choose. i want to ask you, because of an appropriation made by the led legislatur legislature, no referendum, no recall? >> that is correct. because of the appropriation, what we expect is this will probably be on the balance to the in 2014 that michigan cannot be a right to work state.

even though governor snyder signed it today we fully expect to be engaged in this for the next two years. we will have the data to show what the advantages have been. to show what officials are saying that this is going to destroy unions and that they will end up getting stronger. great stuff. many, many thanks we appreciate it. to the stand off, to the show down. where the latest word, this after the speaker delivered a strong but simple message showing us the spending cuts. good evening. >> good evening. it is difficult to tell the difference between the public postures and the private negotiations. you but i want to bring our viewers up to gate.

first of all, we got news that the president sent and offer to the speaker that reduced his demand for revenue. that is a small move toward the republican direction. it did not budge on the $800 billion that the speaker has offered. neither side is talking about concessions. but the speaker and the president had a phone call. but the president went to the speaker went to the house today, and they said it is time for the president to get serious. here is what we do know, we know that the president wants more serious spending. that is not fixing our problem

frankly, it is making it worse. the mund m fundamentals are in place to have a deal come into play. but i talked to a member of congress tonight saying the speaker warned to be prepared for a struggle with the white house. >> we are going to take a brief break and come back. >> i'm talking to a lot of republican senators and house members. but i happen to be optimistic that the worst calamity is not going to happen. stay with us we will be right back.

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a quick word and new development on the international front. late word that the president said that the u.s. will recognize the main syrian opposition group trying to throw out asaad. barbara walters saying we consider them the representative of the people.

>> the president said with them comes responsibilities. reports today say the u.s. is planning to send 20 f-16 fighter jets to syria. >> is this the time to send secretary defense. >> if we are recognizing the opposition there, some reports say that it is full of al qaeda as and iraq and al kid is in syria. it is good that the at min tration is finally doing something. we have beeen sitting on their

hands. >> the u.s. is sending 20 more f-16. he is at war with reformers and there are rights there. we no no idea what this consti tooth constitution. why are we doing this? >> i'm as confused. i kint of say how is that working for you? nothing to do with syria, yemen ebipt and this is a mess and so is our policy. >> you are right. but we want to be careful by not ailnating the military. >> do we know, ebipt was a secularist.

now, the question here is, is it going to become a sharia. is the brotherhood going to get this power. >> that is the biggest concern. we'll see how that goes on sunday. it would be a shame if egypt was less throw. >> why don't we hold this aid back until talks can lay out and send the state department thing over. the secularists and reformers on the straight don't want to do anything. the f-16s are important. the mt. was an important

processes. who is more important the egyptian military or morsey. >> right now i would say the investigate. the gents of the united states in the past has been the ngt. a lot of them were tained in the united states remember a lot of them have been pushed off. it is going to hurt the economy and the other thing about these transfers is that they may open up to iran. >> now folks it wasn't all toll licks today.

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the senate and the house will sign onto expending president obama's eidea to take over. >> he will set the tone for whatever the issue will be. i'm not sure i would use a retre retreat. >> would a resection about extending the tax cuts. >> i can't answer that question. when did we stop talking about who those people paying the taxes would be. many of those almost one miggion are small business people and

not create more jobs hurting economic growth and i think that is what you have to focus on when you talk about race iing w. >> i understand the point. in these negotiations the pras seems to have the or the rich t cuts. >> we haven't tualked enough about what it will mean to the economy. we have to care about who gets hit by it. we have to begin thinking about it. >> not an ees asy thing to do.

we called it decoupling. again, i don't peak for anybody but myself. my point is we need to remind people that there are three things the small business person and where is the spending cut? >> one last one, the gop will be claimed if all of the tax carts experbecause we he how long would that damage last? >> i don't know. it would be back for polltations and bat for the nanly. >> it would take us back to a resection. >> it would be terrible. for everybody. it is tough for the president.

but den, what will happen to the economy? where should we be focusing to me, you invent race taxes if we did so it would be a blow to the economy. he have to race lax tight:but let's try to do it in a sensible way that reduced the harm to the upon lay. he is supmating a ne namr. read the senate saying there will be no boyd in christmas. >> it shout. that meaning that we have to

figure out what the deal is by this weekend. the way that it probably would be acted on. i can see a situation where the house passes a bill and a somewhat different big and send to the president. cha changes would be up to the gauchetiaters. >> senator ron ball. he said woulders do not agree with him. there may be requirements for 60 votes majority. >> are the 610 votes again. >> it depends on what he is involved.

this down you how about the estate tax? we need to retain it as it is today. i don't know a lot of tmts about that. how about dividends rates, all of these things need to be in mix before you can vote or not. now we are going to wish to a new a lert and a near miss at a west virginia nursing home. we have the latest breaking headlines coming into the cnbc newsroom. but it was powerful enough to bathe a 8 foot pipe.

it closed homes and the gas line has been capped. a hand fall of people have been affected. senators and democrats are leading an effort to delay the tax on obama care. the skri has mounted an effort to limit and delay the tax. the pieces of thespire that will top the freedom tower. they will be hoisted to the sky to form the 880 foot. the tower will be 1663 foot towel.

>> and god's blessed the rebuilding of the tower. they, very, very, flurry. >> did we get the latest from the critical clin. we are brought rafting from kitchen dv.

i've been talking to leadership members of the house and senate on the republican side. i do not believe we will fall into the fiscal cliff meaning that neither party will let the tax cuts expire. i think republicans are going to stay at a retreat and voting to extend the middle class tax cuts. that will avoid the miss kal cliff situation. and i may not like this deal at all. one reason stocks are behaving

wellky well. speaker john boehner is pushing the president to offer spending cuts. so with 20 days to grow, is this likely? am i going to be proven right or whong? larry, we are going to avoid the fiscal cliff resection. the white house is acting with impunity right now. and the white house is so far said look, we want to continue talking about one quarter of the president's own architecture. the president said there was a three to one ratio between

savings and cuts and revenue. but they have been silent on this. >> little bit of breaking news. >> wow, the studio is shaking. mr. bhoener is at $800 million. no new information on then ti e ti tiltment. i'm suggesting. it is a game of chicken. neither party can afford this kind of recession. after what we've been through we can't take it. if that meanstending the tax cuts so be it. let me accept your premise.

but i have to pile on more. something that is worse is a debt crisis. if you have a white house that is committed from going from $16 trillion in debt which is where the obama administration would lead us. what do you do with that knowledge? what if you come to the view that the president has created in the state of illinois which is a basket case today. it had a structural dev sif and the remedy was to raise taxes. and what happened? >> $7-8 billion in current unpaid bills more debt than any state in the union. >> no growth makes it worse. >> but look, this could be a deal to extend the so called tax cuts that i owon't like.

but i say this to you. a $500 billion tax increase moving up towards the first quarter of this year will be a disaster for this country. i'm tracking that as you are saying them because it is so confusing. here is the knowledge and the certain ti that we have. there has -- what sales people end up staying in their positions for very long if they over sell a product? it doesn't work. president obama is overselling what the revenues will do. >> you can't over sell a resection. i get your point but another resection which is the greater

probability will drive debt up the wall. the psyche of this country can't take it. i don't want the tax rates to go up. but i think the republican party could be heroic if the judge says okay for the moment. before we deal with the debt ceiling next year let's extend the middle class tax cuts. this could get the gop out from under a political rock. >> the herois many is on the table. that is coming from a party that doesn't believe that we have a revenue problem, we have a spending problem. >> it is a very significant

move. >> i tried. now the big story tonight in mesh mish thousands protest on the ground as a right to work bill is signed ib to law. right to work law in michigan. that is the union paradise. let's bring in robert costa who by the way is the newly reported national review editor. congrats on your promotion. i wanted to ask you. if it could happen in michigan a right to work law that gives individuals real choice where next? >> look republicans had a horrible 2012 but they still hold seats. they have an appetite for having

labor fights. you are going to see them go into pennsylvania. it could happen. a lot of governors are going to start looking at their own states. does this slow that down? does it remind mr. obama and his left of center allies what happened in wisconsin they tried to recall the governor and it didn't work. and now it is spreading to michigan. does it have political implications in dc? sure. that is the big story right now. he has spoken to the workers protesting in the streets. this is the second term battle. how he is going to stand with the unions.

go after them. how dbig a force are they going to be on the national stage? >> you are going to see them reassert themselves larry. they don't have the senate and the white house. so in this period between now and 2016 where are republicans going to make their mark? scott walker paved the way. this is the story. the public and private sector union battle. they start to revolutionize their message. >> many thanks. here now to talk more about the fiscal cliff and michigan. jack bernstein. and kate obenshane. author of divider in chief. you know, kate. i think jarod should think about

how strong this right to work law is passing michigan. that is the union wonderland. the country is running against the unions. studieow the right to work states outperform the other states.

i think we are looking at different studies. i think kate said this is something that -- defamation of unions. it gives the worker the kind of choice. that is the thing. it is the mill of the union leaders pocketing off of the workers and the undue influence

and the rising cost of government. this is recognition that we have to get control over out-of-control governments. i think you were more accurate the first time. i idea here is that you have a free rider problem. when you have folks that are not paying union dues. kate's comment is right. it is a union breaking measure. some people see the unions as a free rider. picking the pockets of non union employees on union work sites. i think you should tell the president and vice president don't pick the american pockets so much. you know, i think republicans at

the end of the day want to make a strategic move to extend the middle class tax cuts. but i think these huge revenue numbers which pick taxpayer pockets. don't go so far in that. taxpayers have limits. >> larry, i thought your position in that interview was right. i was thinking i'm glad larry is here in town comes down to my town to talk about economic growth. and we can have all kinds of arguments that you and i have had for years. but your position was right. we have to solve this problem which is going to involve problems in the interest in the

economy and full session. nobody is arguing that they are going to do anything to stimulate the economy. they have said the opposite. president obama was saying you don't do this in the middle of a recession. i think jacking up the taxes on the job creators on small businesses it is like 700,000 jobs. >> what kate said, senator said you are talking small businesses it is not just rich people we are talking about here. that is why i go back to unions picking pockets here. >> the unions are not the top 2%. >> you may be right. the top two% of households and

small businesses. we are talking about the hedge funds and the pe firms you but i don't want to have. kate, larry, we can have this argument. >> these are hard-working americans. >> we have brought a serious compromise. >> you aren't talking to any cuts. >> you two are fabulous thank you. >> the markets are watching the fiscal cliff deal very closely and they continue to move higher. that is the interesting part. do the big investors miss something. i say the markets should be optimistic. we are going to ask an expert next up. i'm larry kudlow. tdd#: 1-800-345-2550 let's talk about low-cost investing.

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names? >> sure. a lot of stocks. so starbucks which i love. long-term it is a great play. it has global aspirations. they are doing great things. charles shurts, he is going to talk that one to a great level. another one is william sonoma. i like what they are doing. 40% of the sales are tied to the internet. very good balance sheets. >> putting the fiscal cliff aside today. fedex had a good day today. we had these mini strikes but the ports are showing strong

trafficking. if you can find companies like google and apple, you would stay with apple? >> absolutely. one of the great bragrands domit here, apple will do well. >> you are saying, keep your eye on the longer term. don't look at every breath for this clip business. try to have a long der term. >> if you are trying to dance aren't what a politician is saying over here. in guesting for the long-term you have to look three or five years out. >> all right folks the real

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all right a very bad story. you are looking at a live picture outside a mall in portland, oregon. people have been killed. witnesses say the gunman had a rifle. we will report later. president obama, i'm going to switch gears now. he has hired 101 new government employees every day since i took office in 2009. that comes to 143,000 over paid workers. let's talk to chris edwards director of tax and policy at the kato institute. but besides this number 143,000

workers, when everybody has basketball getting laid off. average civilian pay, average federal workday, $134,000. that is $32,000 more than the average pay. that is astonishing. >> if you look at total compensation, the average worker does $124,000 a year versus $68,000 a year. the benefits are amazing. they get a 401(k) styled pension and they get high job security. they are laid off one quarter of the rate that high workers are. we don't want to draw the best and most skilled workers in

washington. >> it is interesting to me, people seem to know this. 67% of us think that the people in the private sector work harder than those in the public sector. the federal workforce has more machine money. we are supposed to be having budget cuts. why isn't anyone looking for it. this is one of the areas where republicans have pushed for spending restraint. there is a lot of money here. federal workers outside of the military cost us $240 billion a year. 100,000 beurocrats in the department of agriculture. let's privatize a lot of it.

half a million people work for the post office. let the private sector figure it out. >> president obama has hired 143,000 federal workers since he took office. >> i don't think anybody knew that. >> thank you to chris edwards. i appreciate it. that is it for tonight's show. thank you for watching. we will be back tomorrow evening with much more.